Ethnic Entrepreneurship and Internationalisation in East Africa

Abstract

Using the World Bank Enterprise Surveys panel data for the East African Community, this paper analyses the influence of ethnic origin of entrepreneurs on internationalisation and firm performance. Using traditional probit and OLS estimation techniques in combination with matching strategies to account for selection and nonlinearity, we show that the African Indian background of the entrepreneur is a conditional predictor for international activity. In addition, we show that the effect of exporting in terms of innovation and growth is stronger for indigenous entrepreneurs when compared to African Indian entrepreneurs. Hence, we conclude that learning by exporting in recent times is larger for indigenous entrepreneurs.